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Wachovia Targeted in Drug Money Laundering Probe

Posted Apr 26, 08 7:20 AM CDT in Business 

(Newser) – Federal prosecutors have targeted Wachovia in an investigation into the use of money-exchange houses along the Mexican border to transfer money from US sales to Latin American drug lords, the Wall Street Journal reports. The bank invested heavily in the casas de cambio despite warnings that such firms were often used by drug cartels for money laundering.

Millions of dollars held in Wachovia accounts have been seized. Wachovia has cut its ties with the exchange firms and is in talks with the Justice Department about reforms and oversight of its compliance system, as part of a possible deal to avoid prosecution.

Source Wall Street Journal

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Wachovia CEO Ken Thompson talks to employees during a meeting at the bank's corporate headquarters in Charlotte, N.C., in this Thursday, Feb. 21, 2008 file photo.   (AP Photo/Chuck Burton)
A federal money-laundering investigation is the latest headache for Wachovia, hard-hit by the credit crunch.   (AP Photo/Chuck Burton)
Cash and guns seized by Mexican authorities. Federal prosecutor are probing Wachovia's links with money transfer companies involved in Latin American money laundering.   (AP Photo/PGR)
Wachovia is the target of a federal probe into drug-money laundering through casas de cambio, or money-exchange houses along the Mexican border.   (Getty Images)
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banking  • Wachovia  • money laundering  • currency exchange  • drug cartel  • bank regulation


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